Retailers urge Government to stop using crumbling High Streets as a 'cash cow'

Retailers braced for the possibility of yet another rise in business rates have urged the Government to stop using crumbling High Streets as a ‘cash cow’.

Business rates have shot up by a total of more than ten per cent over the past two years and another decision is looming this autumn over the next likely increase.

Groups representing the retail sector and their suppliers are rallying to Financial Mail’s campaign calling on Ministers to cap or freeze the rate rise.

They argue that the increases so far have contributed to the decline of the High Street as more people shop online. About 15 per cent of shops are now empty.

High Street struggle: About 15 per cent of shops are now empty

The Government’s review of the situation, under television shopping guru Mary Portas, has been heavily criticised as inadequate.

A
spokesman for the British Independent Retailers Association said:
‘Shops are suffering badly from the inequalities that the Government has
built into the tax system.

‘The
Government tells us that the world has changed and that retail must
change with it, but the Government itself is not changing with the
times. Retail is treated as a cash cow.’

The
association wants the Government to consider ways of spreading the tax
burden more evenly across out-of-town warehouse-style outlets and
internet retailers, which are less affected by rates.

The
British Retail Consortium, which has asked the Government to review the
way in which business rates are calculated, says that while retail
accounts for 28 per cent of rates, it represents only five per cent of
GDP.

The BRC has also
called on the Government to review the way it calculates the tax. But
sources said the Government is unlikely to review the setting of
business rates until 2017.

This
year’s 5.7 per cent rise added £350 million to the bill. In contrast,
the Government has spent only £13 million on pilot schemes to be
overseen by Portas.

Groups
want assurances from Local Government Secretary Eric Pickles – who is
responsible for setting the recommended rate before it is passed to
Chancellor George Osborne – that he will be sympathetic.

The
British Furniture Confederation, an umbrella for 11 other trade bodies
and representing thousands of small businesses and 100,000 jobs, plans
to lobby MPs, with business rates high on the agenda.

Chairman Paul von der Heyde said: ‘This is a fixed cost for business at a time when many are suffering.

‘This does not just affect retailers, it affects every part of the process from design, to manufacturing to the High Street.’

Pickles is in the process of partially devolving responsibility on business rates to local authorities.

Work
is also being undertaken by lobbying groups – including the
50,000-member Association of Convenience Stores – to measure the effect
of April’s rise.

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Retailers urge Government to stop using crumbling High Streets as a 'cash cow'